Personal income rise offers a positive economic sign
A rise in personal income helped boost consumer spending in January, a positive sign after a series of reports this week raised concerns about an economic slowdown, the Associated Press reported.
The Commerce Department reported today that personal incomes rose 1 percent in January, aided by bonus payments to high-income executives and pay raises for federal employees, while consumer spending increased 0.5 percent.
The government reported yesterday that the economy, as measured by the gross domestic product, slowed to a growth rate of 2.2 percent in the fourth quarter of 2006, far below analysts’ initial estimate of 3.5 percent. The Labor Department also reported that the number of recently laid-off workers filing for unemployment benefits rose 7,000 last week to 338,000, a surprise to economists who had expected a drop in jobless claims.
Despite these reports, Federal Reserve Chairman Ben Bernanke said in testimony yesterday that he expects the economy to rebound moderately this year.